COMMERCIAL RESEARCH BANGKOK OFFICE

Transcription

1 COMMERCIAL RESEARCH BANGKOK OFFICE MARKET OVERVIEW Q2 2017

2 HIGHLIGHTS Business sentiment in Thai economy improves. The amount of new office space leased in expanded around 36,368 square metres in Q2 but fell 37.1% from Q1. Supply The current office supply in Q stood at 4,877,670 square metres. The newly launched office buildings this year include Gaysorn Office Tower (32,312 sqm) and Bhiraj Tower at BITEC (31,880 sqm). In the future, the majority of the new buildings next 3 years will be located in areas considered to be Non-CBD but are rapidly emerging to become new commercial districts. Note: These figures exclude multi-owner occupied premises and office buildings smaller than 5,000 square metres. Future Supply We currently expect 64,192 square metres of new supply to be completed at the end of this year. In addition to Overall occupancy rate was 90.82%. FIGURE 1 Office Supply and New Supply from 2012-Q Quarterly average rents stable across the market but still rose by 1.5% per annum. 6,000, ,000, ,000, ,000, ,000, ,000, Existing Supply New Supply 95,815 96, ,335 4,660 15,000 28,920 4,478,535 4,493,535 4,522,455 4,618,270 4,714,675 4,873,010 TABLE 1 Office Future Supply MARCUS BURTENSHAW Head of Commercial Agency Tenants in s office market are faced with a problem. The market still favours the developer. Tenants face increased rents upon renewal, and few relocation prospects offer competitive terms for comparable quality and location. Now more than ever it pays to look ahead. We urge tenants to conduct a thorough analysis of their office accommodation strategy at least one year before their lease expires, and even longer if their scale demands it, or if regional or global corporate real estate departments are involved. TABLE 2 Total Future Supply Bhiraj Tower at BITEC 31,880 Q Sukhumvit -BangnaN on-cbd Gaysorn 2 32,312 Q Ratchadamri CBD MS Siam Tower 37,000 Q Rama 3 Non-CBD Ari Hill 26,110 Q PhaholythinN on-cbd Singha Complex 50,600 Q Asoke-Petchburi Non-CBD Aspiration One 27, Ratchatewi CBD CP Tower 4 48, Rama 4 Non-CBD Famyan Mitrtown 45, Sqmyan CBD 22,000 Q Sukhumvit 40 Non-CBD Whizdorn ,000 Q Sukhumvit 101 Non-CBD 2

3 BANGKOK OFFICE MARKET OVERVIEW Q COMMERCIAL RESEARCH projects under construction, the total amount of new supply of 350,511 square metres would be added to the market in Demand This quarter, net occupied space of the office market was 4,454,894 square metres, representing an overall occupancy rate of 90.82%. The average vacancy rate of Grade A buildings was 7.5%, while Grade B was 6.45% and Grade C was 12.14%. The amount of new office space leased in expanded around 36,368 square metres but fell 37.1% from the previous quarter. This demand has been a very faint positive every year since Note: These figures exclude multi-owner occupied premises and office buildings smaller than 5,000 square metres. Rental Rates The rental rates for office space in have been driven upward over the past six years. The average asking rental rate in Q was around 702 baht per square metre per month, remaining stable from the previous quarter. However, the price increase over the same period last year was at 1.5%. This trend is expected to continue in Q3 and the proceable future. FIGURE 2 Office Supply, Demand and Occupancy Rate, 2012-Q ,000, ,475, ,950, ,425, ,900, % 4,493,535 3,946,923 Supply % 4,522,455 4,092,518 Demand Occupancy Rate % % % 4,618,270 4,203,282 4,714,675 4,346,345 TABLE 3 Occupancy Rate by Grade from Q to Q ,873,010 4,522, % 4,877,670 4,454,894 FIGURE 3 Office Demand and Supply Analysis, Q to Q ,000 90,000 60,000 30, ,000 New Supply Net Take up % 92.0% 88.0% 84.0% 80.0% The average monthly rental rate of Grade A office was 952 baht per square metre, while Grade B was 705 baht per square metre and Grade C was 450 baht per square metre. In this quarter, we have seen many office buildings in command rental rates of more than 1,000 baht per square FIGURE 4 Quarterly Net Take-Up from Q to Q metre per month. Outlook The Bank of Thailand (BOT) has forecasted Thailand GDP annual growth rate in 2017 to be 3.1%, increasing by 0.3% from last year. The key factors of 3

4 GDP growth are a slight recovery of exports and the acceleration of the service sector. The growth rate of the service sector in this year will be 3.4%, increasing by 0.9% from last year. This quarter, the business confidence index of Thailand is expected to have improved at The positive business sentiment index reflects the improvement in confidence in the Thai economy. Therefore, we believe that this is a good sign of potential growth for the office market. Glossary Central Business District (CBD) Central business district, or CBD, is the centre of economic and financial activity of a city. We define this as the area with the greatest concentration of prime office buildings, 5 star hotels and luxury retail. FIGURE 5 Asking Rent of Office by Grade, Q to Q Grade A Grade B Grade C TABLE Grade A, Grade B and Grade C: o Grade A By virtue of their desirability, these prime properties command the highest rents in their market. You will find them in the Central Business District located a near mass transit station, and have a floor plate of at least 1,000 square metres. o Grade B The largest sector of the office market, these are the buildings that are traditionally in the greatest demand; they might not be the most expensive properties in the market but represent good value for money. o Grade C Typically older properties, these buildings provide office space for rent at the most competitive rents in the market. FIGURE 6 Asking Rent of Office by Major Roads, Q Take up the amount of new office space leased during a certain period of time. 4

5 GLOBAL BRIEFING For the latest news, views and analysis on the world of prime property, visit KnightFrankblog.com/global-briefing TABLE 5 SOURCE: BANK OF THAILAND (BOT) AND WORLD BANK STAFF ESTIMATES. NOTE: FIGURES FOR 2017 ARE TENTATIVE, AND MAY PRESENT VARIATIONS RESPECT TO OFFICIAL ESTIMATES. FIGURE 7 SOURCE: BANK OF THAILAND (BOT) REMARKS: 1/ BUSINESS SENTIMENT INDEX IS COMPILED FROM BOT SURVEY DATA OF 1,500 BUSINESSES. 2/ BELOW IS THE INTERPRETATION OF THE INDEX: INDEX = 50 INDICATES THAT BUSINESS SENTIMENT REMAINS STABLE. INDEX > 50 INDICATES THAT BUSINESS SENTIMENT HAS IMPROVED. INDEX < 50 INDICATES THAT BUSINESS SENTIMENT HAS WORSENED. RECENT MARKET-LEADING RESEARCH PUBLICATIONS COMMERCIAL RESIDENTIAL RESEARCH BANGKOK SUPER PRIME LOGISTICS AND PRIME CONDOMINIUM PROPERTY MARKET condominium H1 OVERVIEW 2016 market H1 Q H Logistics Property Market RESIDENTIAL RESEARCH BANGKOK OFFICE condominium MARKET OVERVIEW market Q4 Q Q Office Market Overview Knight Frank Research, Reports are available at KnightFrank.co.th/Research RESIDENTIAL RESEARCH BANGKOK CONDOMINIUM condominium MARKET REPORT market 2H 2016 Q H 2016 Condominium Market Report Thailand Contacts Phanom Kanjanathiemthao Managing Director +66 (0) Ext 124 phanom.kanjanathiemthao@th.knightfrank.com Chaturawit Wattanapruk Executive Director +66 (0) Ext 120 chaturawit.wattanapruk@th.knightfrank.com Surasak Limpa-Arayakul Head of Valuation and Advisory +66 (0) Ext 143 surasak.limpa-arayakul@th.knightfrank.com Roong Sitthisankunchorn Head of Property Management +66 (0) Ext 144 roong.sitthisankunchorn@th.knightfrank.com Marcus Burtenshaw Head of Commercial Agency +66 (0) Ext 104 marcus.burtenshaw@th.knightfrank.com Frank Khan Head of Residential +66 (0) Ext 280 frank.khan@th.knightfrank.com Risinee Sarikaputra Director, Research and Consultancy +66 (0) Ext 180 risinee.sarikaputra@th.knightfrank.com Phuket Contact Nattha Kahapana Knight Frank Phuket +66 (0) Ext 300 nattha.kahapana@th.knightfrank.com Important Notice Knight Frank LLP 2017 This report is published for general information only and not to be relied upon in any way. Although high standards have been used in the preparation of the information, analysis, views and projections presented in this report, no responsibility or liability whatsoever can be accepted by Knight Frank LLP for any loss or damage resultant from any use of, reliance on or reference to the contents of this document. As a general report, this material does not necessarily represent the view of Knight Frank LLP in relation to particular properties or projects. Reproduction of this report in whole or in part is not allowed without prior written approval of Knight Frank LLP to the form and content within which it appears. Knight Frank LLP is a limited liability partnership registered in England with registered number OC Our registered office is 55 Baker Street, London, W1U 8AN, where you may look at a list of members names. 5